Imagine tossing a credit card offer, bank statement or even a phone bill into your trash can, only to have it stolen before it’s picked up on trash day.  That’s probably not something any of us willingly do.  We shred those documents before tossing them, right?  Turns out the IRS doesn’t value our privacy as much we’d hope they would.

The U.S. Treasury investigated procedures the Internal Revenue Service uses in destroying hard copies of our sensitive information and as it turns out, they do little more than toss reams of paper into dumpsters, leaving all of us vulnerable to identity theft and other crimes.  Each IRS office that was audited had identifying information found in its trash bins.  With over $44 billion dollars lost in identity theft each year in this country (in 2003, the dollar figure was $5 billion), it seems the government would be more diligent with taxpayer information.

Unfortunately, these discoveries weren’t isolated.  The offices that were audited are scattered across the country, leading many to believe it’s standard operating procedure for the IRS.  Now though, as a result of this report, measures are finally being put into place, including background checks for subcontractors who are responsible for trash removal.  It’s a start.  Still, with news this week of the FBI’s network being hacked, judgment’s being reserved on whether or not these new measures are enough.

Consumers aren’t the only ones who suffer the consequences of having their identities stolen.  Businesses also lose billions each year when these thieves purchase their products with stolen credit cards or checks, not to mention the banks and credit card companies that forgive charges not made by card holders.

So what does the IRS believe will happen when it’s so careless with our information?  More importantly, has this lax procedure resulted in wreaking havoc in anyone’s life?  Those are questions that most likely will never be answered.  For now, maybe light shed on this policy will result in changes in the way personal information is handled.

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April 15^th is just hours away.  Tax time, by far, is the most stressful time of the year for most Americans.  The holidays, although stressful for many, at least have the promise of family and good food.  Tax day?  Not so much.  Even when we’re anticipating a refund, we’re on pins and needles in hopes the IRS agrees with our own figures and forwards that check with our name on it.

So, in honor of Tax Day (I can hear the collective sighs now), a walk through history reveals some interesting facts.  Broaden your horizons and who knows, it might not feel so intimidating after reading some of the history behind the nightmare we refer to as ‘IRS’.

Did you know the income tax was actually repealed at one time in 1872?  President Lincoln, in his efforts to fund the Civil War, enacted the first income tax in 1862.   Ten years later, it was repealed, only to be resuscitated in 1894 and then ruled unconstitutional in 1895 by the Supreme Court.  It wasn’t until 1913, when Wyoming ratified the 16^th Amendment by becoming the final state that constituted the three quarter majority necessary for the amendment, was the Bureau of Internal Revenue reborn.  Of course, this allowed Congress to bring to life an income tax.  From there, the first Form 1040 was created and can be seen here.

After that, the rates were modified drastically during both World War II and the Depression and each time the income tax was lowered after these dire financial times, it was never as low as it was before the increase.

In the 1950s, the name went from the Bureau of Internal Revenue to the Internal Revenue Service, or IRS.  The president of the United States chooses the IRS commissioner.  The massive restructuring that was said to have taken place in 1998 was due to incredible public pressure to lessen its overpowering and intimidating image.  Its new image attempts to be more inviting or open to taxpayers seeking information or assistance.

So as we gear up to put yet another April 15^th behind us, what does the IRS suggest we do if we anticipate problems with owing instead of being owed?  If you have an accountant, or bookkeeper, be open with them.  Allow their expertise to help you.  If you’re doing your own taxes, you’re encouraged to contact the IRS with any problems or questions you have.  The best way to contact anyone at the IRS?  Their website at www.irs.gov is the first best place to start.  If things are really bad, you’ll want to speak with a lawyer who’s experienced in back taxes and other IRS problems.  Your lawyer can discuss any options for resolution and can work with the IRS on your behalf to put these problems behind you once and for all.

So you get one of those little green “here comes bad news” cards in the mail alerting you to the fact you have a gift at the post office that requires your signature. Your heart sinks to your recently pedicured toes and you think it can be one of two things: the hubby took the chicken route in notifying you of his desire for a divorce, or worse, the IRS wishes to correspond with you. Since you could care less if your less than perfect spouse is up to no good with the secretary from the fourth floor, you begin to prepare for a slow dance with the Internal Revenue Service. It’s not long before you realize you will need the services of a tax attorney. Sounds easy enough, but when you have no idea where to start, it’s more than a little overwhelming. The first thing you want to do is gather any relevant information, including the certified mail that triggered this need for legal assistance. If you’re not sure, err on the side of caution and include paperwork that might or might not be useful. A good tax lawyer will, by nature, have to be a patient soul. After all, he or she deals with the IRS on a daily basis, right? Be sure you’ve made your lawyer aware of any deadlines you might have previously agreed to or any other offers the IRS might have made in the past - before you hired counsel. It’s also beneficial to your sanity to organize this information by date. These problems, nerve wracking as they are, are fixable - but only after you’ve gone through the whole song and dance that will appease the government.

Choosing a good tax lawyer sounds easy, but don’t be fooled. Ideally, you want to choose someone you feel comfortable with and who you feel as though understands the nature of your specific problem. Good lawyers recognize that although they deal with their specialties on a daily basis, each client has his or her own nuances and unique situations. Just as it’s important to choose a lawyer you feel most at ease with, you also must extend a level of trust and know that even if you don’t hear from your lawyer on an hourly basis doesn’t mean your case has hit the back burner. Often, just as you are at the mercy of the IRS’s timeframes, your attorney is too. His training has taught him when to panic and any IRS attorney worth his salt will tell you there’s very little reason, if any, that justifies panic mode. You do your part - provide all of the information that will help your lawyer help you and then give him the time to do the very thing you hired him for: negotiate on your behalf to get you out of this quagmire.

If it’s any help, the IRS, over the past decade, has managed to soften its image as well as its approach to past due tax bills. Only under the most extraordinary circumstances will you face mountains that appear to have no resolution. Usually, a few phone calls, a little negotiation between your lawyer and the IRS and a solid repayment plan will break the chains you feel are weighing you down and preventing you from giving the deserved attention to the other legalities in your life: teaching the hubby the do’s and don’ts of a proper affair and the consequences of having been caught.